Government Has No Intention of Deregulating Construction in Gangnam Area

Deputy Prime Minister and Minister of Finance and Economy Han Duck-soo said on July 26 that the government has not discussed easing restrictions on reconstruction in the Gangnam area at all and that deregulation policy will not be included in the Comprehensive Property Measure in late August.

Minister Han added that the authorities would make a final decision as early as August on whether they would allow big conglomerates to build or expand their manufacturing facilities within the metropolitan area after evaluating each case.

He announced at a press conference on the same day, “The government is planning to implement redevelopment projects in the Gangbuk area in order to create a good residential environment equivalent to Gangnam’s,” adding, “However, it will maintain the current system since housing prices could be unstable if the government eases regulations on reconstruction.”

He also said, “The government and the ruling party have never considered or made agreements on scrapping the benefits of tax exemption subject to a household with one house, and has no intention to change the system unfavorable to people with one house.”

He also replied on the direction of enhancing property tax system, “The relevant officials have discussed the issues in order to rationalize property holding taxes and debated on substantial problems-should they increase only the comprehensive real estate taxes or how do they deal with property taxes?”

Along with that, he added, “For the comprehensive real estate tax, the government is reviewing a new tax system that repeals the 50 percent ceiling on tax burden increases and maintains the current property tax. We will also think of implementing regulations on dividing or transferring property in order to evade taxes.”

Chi-Young Shin higgledy@donga.com